G.R. No.

100098 December 29, 1995

EMERALD GARMENT MANUFACTURING
CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, BUREAU OF PATENTS,
TRADEMARKS AND TECHNOLOGY TRANSFER and H.D. LEE
COMPANY, INC., respondents.

KAPUNAN, J.:
In this petition for review on certiorari under Rule 45 of the
Revised Rules of Court, Emerald Garment Manufacturing
Corporation seeks to annul the decision of the Court of Appeals
dated 29 November 1990 in CA-G.R. SP No. 15266 declaring
petitioner's trademark to be confusingly similar to that of private
respondent and the resolution dated 17 May 1991 denying
petitioner's motion for reconsideration.
The record reveals the following antecedent facts:
On 18 September 1981, private respondent H.D. Lee Co., Inc., a
foreign corporation organized under the laws of Delaware, U.S.A.,
filed with the Bureau of Patents, Trademarks & Technology
Transfer (BPTTT) a Petition for Cancellation of Registration No. SR
5054 (Supplemental Register) for the trademark "STYLISTIC MR.
LEE" used on skirts, jeans, blouses, socks, briefs, jackets, jogging

suits, dresses, shorts, shirts and lingerie under Class 25, issued on
27 October 1980 in the name of petitioner Emerald Garment
Manufacturing Corporation, a domestic corporation organized and
existing under Philippine laws. The petition was docketed as Inter
Partes Case No. 1558. 1
Private respondent, invoking Sec. 37 of R.A. No. 166 (Trademark
Law) and Art. VIII of the Paris Convention for the Protection of
Industrial Property, averred that petitioner's trademark "so closely
resembled its own trademark, 'LEE' as previously registered and
used in the Philippines, and not abandoned, as to be likely, when
applied to or used in connection with petitioner's goods, to cause
confusion, mistake and deception on the part of the purchasing
public as to the origin of the goods." 2
In its answer dated 23 March 1982, petitioner contended that its
trademark was entirely and unmistakably different from that of
private respondent and that its certificate of registration was
legally and validly granted. 3
On 20 February 1984, petitioner caused the publication of its
application for registration of the trademark "STYLISTIC MR. LEE"
in the Principal Register." 4
On 27 July 1984, private respondent filed a notice of opposition to
petitioner's application for registration also on grounds that
petitioner's trademark was confusingly similar to its "LEE"

trademark. 5 The case was docketed as Inter Partes Case No.

1860.
On 21 June 1985, the Director of Patents, on motion filed by
private respondent dated 15 May 1985, issued an order
consolidating Inter Partes Cases Nos. 1558 and 1860 on grounds
that a common question of law was involved. 6
On 19 July 1988, the Director of Patents rendered a decision
granting private respondent's petition for cancellation and
opposition to registration.
The Director of Patents found private respondent to be the prior
registrant of the trademark "LEE" in the Philippines and that it had
been using said mark in the Philippines. 7
Moreover, the Director of Patents, using the test of dominancy,
declared that petitioner's trademark was confusingly similar to
private respondent's mark because "it is the word 'Lee' which
draws the attention of the buyer and leads him to conclude that
the goods originated from the same manufacturer. It is undeniably
the dominant feature of the mark." 8
On 3 August 1988, petitioner appealed to the Court of Appeals
and on 8 August 1988, it filed with the BPTTT a Motion to Stay
Execution of the 19 July 1988 decision of the Director of Patents
on grounds that the same would cause it great and irreparable

damage and injury. Private respondent submitted its opposition on

22 August 1988.9
On 23 September 1988, the BPTTT issued Resolution No. 88-33
granting petitioner's motion to stay execution subject to the
following terms and conditions:
1. That under this resolution, Respondent-Registrant is
authorized only to dispose of its current stock using the
mark "STYLISTIC MR. LEE";
2. That Respondent-Registrant is strictly prohibited from
further production, regardless of mode and source, of
the mark in question (STYLISTIC MR. LEE) in addition to
its current stock;
3. That this relief Order shall automatically cease upon
resolution of the Appeal by the Court of Appeals and, if
the Respondent's appeal loses, all goods bearing the
mark "STYLISTIC MR. LEE" shall be removed from the
market, otherwise such goods shall be seized in
accordance with the law.
SO ORDERED. 10
On 29 November 1990, the Court of Appeals promulgated its
decision affirming the decision of the Director of Patents dated 19
July 1988 in all respects. 11

In said decision the Court of Appeals expounded, thus:

xxx xxx xxx
Whether or not a trademark causes confusion and is
likely to deceive the public is a question of fact which is
to be resolved by applying the "test of dominancy",
meaning, if the competing trademark contains the main
or essential or dominant features of another by reason
of which confusion and deception are likely to result,
then infringement takes place; that duplication or
imitation is not necessary, a similarity in the dominant
features of the trademark would be sufficient.
The word "LEE" is the most prominent and distinctive
feature of the appellant's trademark and all of the
appellee's "LEE" trademarks. It is the mark which draws
the attention of the buyer and leads him to conclude
that the goods originated from the same manufacturer.
While it is true that there are other words such as
"STYLISTIC", printed in the appellant's label, such word
is printed in such small letters over the word "LEE" that
it is not conspicuous enough to draw the attention of
ordinary buyers whereas the word "LEE" is printed
across the label in big, bold letters and of the same
color, style, type and size of lettering as that of the
trademark of the appellee. The alleged difference is too
insubstantial to be noticeable. Even

granting arguendo that the word "STYLISTIC" is

conspicuous enough to draw attention, the goods may
easily be mistaken for just another variation or line of
garments under the ap appelle's "LEE" trademarks in
view of the fact that the appellee has registered
trademarks which use other words in addition to the
principal mark "LEE" such as "LEE RIDERS", "LEESURES"
and "LEE LEENS". The likelihood of confusion is further
made more probable by the fact that both parties are
engaged in the same line of business. It is well to
reiterate that the determinative factor in ascertaining
whether or not the marks are confusingly similar to
each other is not whether the challenged mark would
actually cause confusion or deception of the purchasers
but whether the use of such mark would likely cause
confusion or mistake on the part of the buying public.
xxx xxx xxx
The appellee has sufficiently established its right to
prior use and registration of the trademark "LEE" in the
Philippines and is thus entitled to protection from any
infringement upon the same. It is thus axiomatic that
one who has identified a peculiar symbol or mark with
his goods thereby acquires a property right in such
symbol or mark, and if another infringes the trademark,
he thereby invokes this property right.

The merchandise or goods being sold by the parties are

not that expensive as alleged to be by the appellant
and are quite ordinary commodities purchased by the
average person and at times, by the ignorant and the
unlettered. Ordinary purchasers will not as a rule
examine the small letterings printed on the label but
will simply be guided by the presence of the striking
mark "LEE". Whatever difference there may be will pale
in insignificance in the face of an evident similarity in
the dominant features and overall appearance of the
labels of the parties. 12
xxx xxx xxx
On 19 December 1990, petitioner filed a motion for
reconsideration of the above-mentioned decision of the Court of
Appeals.
Private respondent opposed said motion on 8 January 1991 on
grounds that it involved an impermissible change of theory on
appeal. Petitioner allegedly raised entirely new and unrelated
arguments and defenses not previously raised in the proceedings
below such as laches and a claim that private respondent
appropriated the style and appearance of petitioner's trademark
when it registered its "LEE" mark under Registration No. 44220. 13
On 17 May 1991, the Court of Appeals issued a resolution
rejecting petitioner's motion for reconsideration and ruled thus:

xxx xxx xxx

A defense not raised in the trial court cannot be raised
on appeal for the first time. An issue raised for the first
time on appeal and not raised timely in the proceedings
in the lower court is barred by estoppel.
The object of requiring the parties to present all
questions and issues to the lower court before they can
be presented to this Court is to have the lower court
rule upon them, so that this Court on appeal may
determine whether or not such ruling was erroneous.
The purpose is also in furtherance of justice to require
the party to first present the question he contends for
in the lower court so that the other party may not be
taken by surprise and may present evidence to properly
meet the issues raised.
Moreover, for a question to be raised on appeal, the
same must also be within the issues raised by the
parties in their pleadings. Consequently, when a party
deliberately adopts a certain theory, and the case is
tried and decided based upon such theory presented in
the court below, he will not be permitted to change his
theory on appeal. To permit him to do so would be
unfair to the adverse party. A question raised for the
first time on appeal, there having opportunity to raise

them in the court of origin constitutes a change of

theory which is not permissible on appeal.
In the instant case, appellant's main defense pleaded in
its answer dated March 23, 1982 was that there was
"no confusing similarity between the competing
trademark involved. On appeal, the appellant raised a
single issue, to wit:
The only issue involved in this case is
whether or not respondent-registrant's
trademark "STYLISTIC MR. LEE" is confusingly
similar with the petitioner's trademarks "LEE
or LEERIDERS, LEE-LEENS and LEE-SURES."
Appellant's main argument in this motion for
reconsideration on the other hand is that the appellee is
estopped by laches from asserting its right to its
trademark. Appellant claims although belatedly that
appellee went to court with "unclean hands" by
changing the appearance of its trademark to make it
identical to the appellant's trademark.
Neither defenses were raised by the appellant in the
proceedings before the Bureau of Patents. Appellant
cannot raise them now for the first time on appeal, let
alone on a mere motion for reconsideration of the
decision of this Court dismissing the appellant's appeal.

While there may be instances and situations justifying

relaxation of this rule, the circumstance of the instant
case, equity would be better served by applying the
settled rule it appearing that appellant has not given
any reason at all as to why the defenses raised in its
motion for reconsideration was not invoked earlier. 14
xxx xxx xxx
Twice rebuffed, petitioner presents its case before this Court on
the following assignment of errors:
I. THE COURT OF APPEALS ERRED IN NOT FINDING THAT
PRIVATE RESPONDENT CAUSED THE ISSUANCE OF A
FOURTH "LEE" TRADEMARK IMITATING THAT OF THE
PETITIONER'S ON MAY 5, 1989 OR MORE THAN EIGHT
MONTHS AFTER THE BUREAU OF PATENT'S DECISION
DATED JULY 19, 1988.
II. THE COURT OF APPEALS ERRED IN RULING THAT THE
DEFENSE OF ESTOPPEL BY LACHES MUST BE RAISED IN
THE PROCEEDINGS BEFORE THE BUREAU OF PATENTS,
TRADEMARKS AND TECHNOLOGY TRANSFER.
III. THE COURT OF APPEALS ERRED WHEN IT
CONSIDERED PRIVATE RESPONDENT'S PRIOR
REGISTRATION OF ITS TRADEMARK AND DISREGARDED
THE FACT THAT PRIVATE RESPONDENT HAD FAILED TO

PROVE COMMERCIAL
USE THEREOF BEFORE FILING OF APPLICATION FOR
REGISTRATION. 15
In addition, petitioner reiterates the issues it raised in the Court of
Appeals:
I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER OR
NOT PETITIONER'S TRADEMARK SYTLISTIC MR. LEE, IS
CONFUSINGLY SIMILAR WITH THE PRIVATE
RESPONDENT'S TRADEMARK LEE OR LEE-RIDER, LEELEENS AND LEE-SURES.
II. PETITIONER'S EVIDENCES ARE CLEAR AND
SUFFICIENT TO SHOW THAT IT IS THE PRIOR USER AND
ITS TRADEMARK IS DIFFERENT FROM THAT OF THE
PRIVATE RESPONDENT.
III. PETITIONER'S TRADEMARK IS ENTIRELY DIFFERENT
FROM THE PRIVATE RESPONDENT'S AND THE
REGISTRATION OF ITS TRADEMARK IS PRIMA
FACIE EVIDENCE OF GOOD FAITH.
IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK
CANNOT BE CONFUSED WITH PRIVATE RESPONDENT'S
LEE TRADEMARK. 16
Petitioner contends that private respondent is estopped from
instituting an action for infringement before the BPTTT under the

equitable principle of laches pursuant to Sec. 9-A of R.A. No. 166,

otherwise known as the Law on Trade-marks, Trade-names and
Unfair Competition:
Sec. 9-A. Equitable principles to govern proceedings.
In opposition proceedings and in all other inter partes
proceedings in the patent office under this act,
equitable principles of laches, estoppel, and
acquiescence, where applicable, may be considered
and applied.
Petitioner alleges that it has been using its trademark "STYLISTIC
MR. LEE" since 1 May 1975, yet, it was only on 18 September
1981 that private respondent filed a petition for cancellation of
petitioner's certificate of registration for the said trademark.
Similarly, private respondent's notice of opposition to petitioner's
application for registration in the principal register was belatedly
filed on 27 July 1984. 17
Private respondent counters by maintaining that petitioner was
barred from raising new issues on appeal, the only contention in
the proceedings below being the presence or absence of
confusing similarity between the two trademarks in question. 18
We reject petitioner's contention.
Petitioner's trademark is registered in the supplemental register.
The Trademark Law (R.A. No. 166) provides that "marks and

tradenames for the supplemental register shall not be published

for or be subject to opposition, but shall be published on
registration in the Official Gazette." 19 The reckoning point,
therefore, should not be 1 May 1975, the date of alleged use by
petitioner of its assailed trademark but 27 October 1980, 20 the
date the certificate of registration SR No. 5054 was published in
the Official Gazette and issued to petitioner.
It was only on the date of publication and issuance of the
registration certificate that private respondent may be considered
"officially" put on notice that petitioner has appropriated or is
using said mark, which, after all, is the function and purpose of
registration in the supplemental register. 21 The record is bereft of
evidence that private respondent was aware of petitioner's
trademark before the date of said publication and issuance.
Hence, when private respondent instituted cancellation
proceedings on 18 September 1981, less than a year had passed.
Corollarily, private respondent could hardly be accused of
inexcusable delay in filing its notice of opposition to petitioner's
application for registration in the principal register since said
application was published only on 20 February 1984. 22 From the
time of publication to the time of filing the opposition on 27 July
1984 barely five (5) months had elapsed. To be barred from
bringing suit on grounds of estoppel and laches, the delay must
be
lengthy. 23

More crucial is the issue of confusing similarity between the two

trademarks. Petitioner vehemently contends that its trademark
"STYLISTIC MR. LEE" is entirely different from and not confusingly
similar to private respondent's "LEE" trademark.
Private respondent maintains otherwise. It asserts that
petitioner's trademark tends to mislead and confuse the public
and thus constitutes an infringement of its own mark, since the
dominant feature therein is the word "LEE."
The pertinent provision of R.A. No. 166 (Trademark Law) states
thus:
Sec. 22. Infringement, what constitutes. Any person
who shall use, without the consent of the registrant,
any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in
connection with the sale, offering for sale, or
advertising of any goods, business or services on or in
connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others
as to the source or origin of such goods or services, or
identity of such business; or reproduce, counterfeit,
copy or colorably imitable any such mark or trade-name
and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business

or services; shall be liable to a civil action by the

registrant for any or all of the remedies herein provided.
Practical application, however, of the aforesaid provision is easier
said than done. In the history of trademark cases in the
Philippines, particularly in ascertaining whether one trademark is
confusingly similar to or is a colorable imitation of another, no set
rules can be deduced. Each case must be decided on its own
merits.
In Esso Standard Eastern, Inc. v. Court of Appeals, 24 we held:
. . . But likelihood of confusion is a relative concept; to
be determined only according to the particular, and
sometimes peculiar, circumstances of each case. It is
unquestionably true that, as stated inCoburn vs. Puritan
Mills, Inc.: "In trademark cases, even more than in other
litigation, precedent must be studied in the light of the
facts of the particular case."
xxx xxx xxx
Likewise, it has been observed that:
In determining whether a particular name or mark is a
"colorable imitation" of another, no all-embracing rule
seems possible in view of the great number of factors
which must necessarily be considered in resolving this
question of fact, such as the class of product or

business to which the article belongs; the product's

quality, quantity, or size, including its wrapper or
container; the dominant color, style, size, form,
meaning of letters, words, designs and emblems used;
the nature of the package, wrapper or container; the
character of the product's purchasers; location of the
business; the likelihood of deception or the mark or
name's tendency to confuse;
etc. 25
Proceeding to the task at hand, the essential element of
infringement is colorable imitation. This term has been defined as
"such a close or ingenious imitation as to be calculated to deceive
ordinary purchasers, or such resemblance of the infringing mark
to the original as to deceive an ordinary purchaser giving such
attention as a purchaser usually gives, and to cause him to
purchase the one supposing it to be the other." 26
Colorable imitation does not mean such similitude as
amounts to identity. Nor does it require that all the
details be literally copied. Colorable imitation refers to
such similarity in form, content, words, sound, meaning,
special arrangement, or general appearance of the
trademark or tradename with that of the other mark or
tradename in their over-all presentation or in their
essential, substantive and distinctive parts as would

likely mislead or confuse persons in the ordinary course

of purchasing the genuine article. 27
In determining whether colorable imitation exists, jurisprudence
has developed two kinds of tests the Dominancy Test applied
in Asia Brewery, Inc. v. Court of Appeals

28

and other cases

29

and

the Holistic Test developed in Del Monte Corporation v. Court of

Appeals 30 and its proponent cases. 31
As its title implies, the test of dominancy focuses on the similarity
of the prevalent features of the competing trademarks which
might cause confusion or deception and thus constitutes
infringement.
xxx xxx xxx
. . . If the competing trademark contains the main or
essential or dominant features of another, and
confusion and deception is likely to result, infringement
takes place. Duplication or imitation is not necessary;
nor it is necessary that the infringing label should
suggest an effort to imitate. [C. Neilman Brewing Co. v.
Independent Brewing Co., 191 F., 489, 495, citing Eagle
White Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The
question at issue in cases of infringement of
trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the
mind of the public or deceive purchasers. (Auburn

Rubber Corporation vs. Honover Rubber Co., 107 F. 2d

588; . . .) 32
xxx xxx xxx
On the other side of the spectrum, the holistic test mandates that
the entirety of the marks in question must be considered in
determining confusing similarity.
xxx xxx xxx
In determining whether the trademarks are confusingly
similar, a comparison of the words is not the only
determinant factor. The trademarks in their entirety as
they appear in their respective labels or hang tags must
also be considered in relation to the goods to which
they are attached. The discerning eye of the observer
must focus not only on the predominant words but also
on the other features appearing in both labels in order
that he may draw his conclusion whether one is
confusingly similar to the other. 33
xxx xxx xxx
Applying the foregoing tenets to the present controversy and
taking into account the factual circumstances of this case, we
considered the trademarks involved as a whole and rule that
petitioner's "STYLISTIC MR. LEE" is not confusingly similar to
private respondent's "LEE" trademark.

Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although

on its label the word "LEE" is prominent, the trademark should be
considered as a whole and not piecemeal. The dissimilarities
between the two marks become conspicuous, noticeable and
substantial enough to matter especially in the light of the
following variables that must be factored in.
First, the products involved in the case at bar are, in the main,
various kinds of jeans. These are not your ordinary household
items like catsup, soysauce or soap which are of minimal cost.
Maong pants or jeans are not inexpensive. Accordingly, the casual
buyer is predisposed to be more cautious and discriminating in
and would prefer to mull over his purchase. Confusion and
deception, then, is less likely. In Del Monte Corporation v. Court of
Appeals,

34

we noted that:

. . . Among these, what essentially determines the

attitudes of the purchaser, specifically his inclination to
be cautious, is the cost of the goods. To be sure, a
person who buys a box of candies will not exercise as
much care as one who buys an expensive watch. As a
general rule, an ordinary buyer does not exercise as
much prudence in buying an article for which he pays a
few centavos as he does in purchasing a more valuable
thing. Expensive and valuable items are normally
bought only after deliberate, comparative and
analytical investigation. But mass products, low priced

articles in wide use, and matters of everyday purchase

requiring frequent replacement are bought by the
casual consumer without great
care. . . .
Second, like his beer, the average Filipino consumer generally
buys his jeans by brand. He does not ask the sales clerk for
generic jeans but for, say, a Levis, Guess, Wrangler or even an
Armani. He is, therefore, more or less knowledgeable and familiar
with his preference and will not easily be distracted.
Finally, in line with the foregoing discussions, more credit should
be given to the "ordinary purchaser." Cast in this particular
controversy, the ordinary purchaser is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer" considering the
type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok

35

is better

suited to the present case. There, the "ordinary purchaser" was

defined as one "accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of fraudulent
simulation is to be found in the likelihood of the deception of
some persons in some measure acquainted with an established
design and desirous of purchasing the commodity with which that
design has been associated. The test is not found in the
deception, or the possibility of deception, of the person who
knows nothing about the design which has been counterfeited,
and who must be indifferent between that and the other. The

simulation, in order to be objectionable, must be such as appears

likely to mislead the ordinary intelligent buyer who has a need to
supply and is familiar with the article that he seeks to purchase."
There is no cause for the Court of Appeal's apprehension that
petitioner's products might be mistaken as "another variation or
line of garments under private respondent's 'LEE'
trademark". 36 As one would readily observe, private respondent's
variation follows a standard format "LEERIDERS," "LEESURES" and
"LEELEENS." It is, therefore, improbable that the public would
immediately and naturally conclude that petitioner's "STYLISTIC
MR. LEE" is but another variation under private respondent's
"LEE" mark.
As we have previously intimated the issue of confusing similarity
between trademarks is resolved by considering the distinct
characteristics of each case. In the present controversy, taking
into account these unique factors, we conclude that the
similarities in the trademarks in question are not sufficient as to
likely cause deception and confusion tantamount to infringement.
Another way of resolving the conflict is to consider the marks
involved from the point of view of what marks are registrable
pursuant to Sec. 4 of R.A. No. 166, particularly paragraph 4 (e):
CHAPTER II-A. The Principal Register
(Inserted by Sec. 2, Rep. Act No. 638.)

Sec. 4. Registration of trade-marks, trade-names and

service-marks on the principal register. There is
hereby established a register of trade-marks, tradenames and service-marks which shall be known as the
principal register. The owner of a trade-mark, tradename or service-mark used to distinguish his goods,
business or services from the goods, business or
services of others shall have the right to register the
same on the principal register, unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when
applied to or used in connection with the goods,
business or services of the applicant is merely
descriptive or deceptively misdescriptive of them, or
when applied to or used in connection with the goods,
business or services of the applicant is primarily
geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a
surname; (Emphasis ours.)
xxx xxx xxx
"LEE" is primarily a surname. Private respondent cannot,
therefore, acquire exclusive ownership over and singular use of
said term.

. . . It has been held that a personal name or surname

may not be monopolized as a trademark or tradename
as against others of the same name or surname. For in
the absence of contract, fraud, or estoppel, any man
may use his name or surname in all legitimate ways.
Thus, "Wellington" is a surname, and its first user has
no cause of action against the junior user of
"Wellington" as it is incapable of exclusive
appropriation. 37
In addition to the foregoing, we are constrained to agree with
petitioner's contention that private respondent failed to prove
prior actual commercial use of its "LEE" trademark in the
Philippines before filing its application for registration with the
BPTTT and hence, has not acquired ownership over said mark.
Actual use in commerce in the Philippines is an essential
prerequisite for the acquisition of ownership over a trademark
pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A.
No. 166) which explicitly provides that:
CHAPTER II. Registration of Marks and Trade-names.
Sec. 2. What are registrable. Trade-marks, tradenames, and service marks owned by persons,
corporations, partnerships or associations domiciled in
the Philippines and by persons, corporations,
partnerships, or associations domiciled in any foreign

country may be registered in accordance with the

provisions of this act: Provided, That said trademarks, trade-names, or service marks are actually in
use in commerce and services not less than two
months in the Philippines before the time the
applications for registration are filed: And Provided,
further, That the country of which the applicant for
registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such
fact is officially certified, with a certified true copy of
the foreign law translated into the English language, by
the government of the foreign country to the
Government of the Republic of the Philippines. (As
amended.) (Emphasis ours.)
Sec. 2-A. Ownership of trade-marks, trade-names and
service-marks; how acquired. Anyone who lawfully
produces or deals in merchandise of any kind or who
engages in lawful business, or who renders any lawful
service in commerce, by actual use hereof in
manufacture or trade, in business, and in the service
rendered; may appropriate to his exclusive use a trademark, a trade-name, or a service-mark not so
appropriated by another, to distinguish his
merchandise, business or services from others. The
ownership or possession of trade-mark, trade-name,
service-mark, heretofore or hereafter appropriated, as

in this section provided, shall be recognized and

protected in the same manner and to the same extent
as are other property rights to the law. (As amended.)
(Emphasis ours.)
The provisions of the 1965 Paris Convention for the Protection of
Industrial Property

38

relied upon by private respondent and Sec.

21-A of the Trademark Law (R.A. No. 166) 39 were sufficiently

expounded upon and qualified in the recent case of Philip Morris,
Inc. v. Court of Appeals: 40
xxx xxx xxx
Following universal acquiescence and comity, our
municipal law on trademarks regarding the requirement
of actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent
clash is being decided by a municipal tribunal (Mortisen
vs. Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions, 93; Paras, International Law
and World Organization, 1971 Ed., p. 20). Withal, the
fact that international law has been made part of the
law of the land does not by any means imply the
primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation
as applied in most countries, rules of international law
are given a standing equal, not superior, to national
legislative enactments.

xxx xxx xxx

In other words, (a foreign corporation) may have the
capacity to sue for infringement irrespective of lack of
business activity in the Philippines on account of
Section 21-A of the Trademark Law but the question of
whether they have an exclusive right over their symbol
as to justify issuance of the controversial writ will
depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same
law. It is thus incongruous for petitioners to claim that
when a foreign corporation not licensed to do business
in the Philippines files a complaint for infringement, the
entity need not be actually using its trademark in
commerce in the Philippines. Such a foreign corporation
may have the personality to file a suit for infringement
but it may not necessarily be entitled to protection due
to absence of actual use of the emblem in the local
market.
xxx xxx xxx
Undisputably, private respondent is the senior registrant, having
obtained several registration certificates for its various
trademarks "LEE," "LEERIDERS," and "LEESURES" in both the
supplemental and principal registers, as early as 1969 to
1973. 41 However, registration alone will not suffice. In Sterling

Products International, Inc. v.Farbenfabriken Bayer

Aktiengesellschaft, 42 we declared:
xxx xxx xxx
A rule widely accepted and firmly entrenched because
it has come down through the years is that actual use
in commerce or business is a prerequisite in the
acquisition of the right of ownership over a trademark.
xxx xxx xxx
It would seem quite clear that adoption alone of a
trademark would not give exclusive right thereto. Such
right "grows out of their actual use." Adoption is not
use. One may make advertisements, issue circulars,
give out price lists on certain goods; but these alone
would not give exclusive right of use. For trademark is a
creation of use. The underlying reason for all these is
that purchasers have come to understand the mark as
indicating the origin of the wares. Flowing from this is
the trader's right to protection in the trade he has built
up and the goodwill he has accumulated from use of
the trademark. Registration of a trademark, of course,
has value: it is an administrative act declaratory of a
pre-existing right. Registration does not, however,
perfect a trademark right. (Emphasis ours.)

xxx xxx xxx

To augment its arguments that it was, not only the prior
registrant, but also the prior user, private respondent invokes Sec.
20 of the Trademark Law, thus:
Sec. 20. Certificate of registration prima facie evidence
of validity. A certificate of registration of a mark or
tradename shall be a prima facie evidence of the
validity of the registration, the registrant's ownership of
the mark or trade-name, and of the registrant's
exclusive right to use the same in connection with the
goods, business or services specified in the certificate,
subject to any conditions and limitations stated therein.
The credibility placed on a certificate of registration of one's
trademark, or its weight as evidence of validity, ownership and
exclusive use, is qualified. A registration certificate serves merely
as prima facie evidence. It is not conclusive but can and may be
rebutted by controverting evidence.
Moreover, the aforequoted provision applies only to registrations
in the principal register. 43 Registrations in the supplemental
register do not enjoy a similar privilege. A supplemental register
was created precisely for the registration of marks which are not
registrable on the principal register due to some defects. 44

The determination as to who is the prior user of the trademark is

a question of fact and it is this Court's working principle not to
disturb the findings of the Director of Patents on this issue in the
absence of any showing of grave abuse of discretion. The findings
of facts of the Director of Patents are conclusive upon the
Supreme Courtprovided they are supported by substantial
evidence. 45
In the case at bench, however, we reverse the findings of the
Director of Patents and the Court of Appeals. After a meticulous
study of the records, we observe that the Director of Patents and
the Court of Appeals relied mainly on the registration certificates
as proof of use by private respondent of the trademark "LEE"
which, as we have previously discussed are not sufficient. We
cannot give credence to private respondent's claim that its "LEE"
mark first reached the Philippines in the 1960's through local
sales by the Post Exchanges of the U.S. Military Bases in the
Philippines 46 based as it was solely on the self-serving statements
of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a
wholly owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein
private respondent.

47

Similarly, we give little weight to the

numerous
vouchers representing various advertising expenses in the
Philippines for "LEE" products.

48

It is well to note that these

expenses were incurred only in 1981 and 1982 by LEE (Phils.), Inc.
after it entered into a licensing agreement with private
respondent on 11 May 1981. 49

On the other hand, petitioner has sufficiently shown that it has

been in the business of selling jeans and other garments adopting
its "STYLISTIC MR. LEE" trademark since 1975 as evidenced by
appropriate sales invoices to various stores and retailers. 50
Our rulings in Pagasa Industrial Corp. v. Court of
Appeals 51 and Converse Rubber Corp. v. Universal Rubber
Products, Inc., 52respectively, are instructive:
The Trademark Law is very clear. It requires actual
commercial use of the mark prior to its registration.
There is no dispute that respondent corporation was the
first registrant, yet it failed to fully substantiate its
claim that it used in trade or business in the Philippines
the subject mark; it did not present proof to invest it
with exclusive, continuous adoption of the trademark
which should consist among others, of considerable
sales since its first use. The invoices submitted by
respondent which were dated way back in 1957 show
that the zippers sent to the Philippines were to be used
as "samples" and "of no commercial value." The
evidence for respondent must be clear, definite and
free from inconsistencies. "Samples" are not for sale
and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to
the "use" contemplated by law. Respondent did not
expect income from such "samples." There were no

receipts to establish sale, and no proof were presented

to show that they were subsequently sold in the
Philippines.
xxx xxx xxx
The sales invoices provide the best proof that there
were actual sales of petitioner's product in the country
and that there was actual use for a protracted period of
petitioner's trademark or part thereof through these
sales.
For lack of adequate proof of actual use of its trademark in the
Philippines prior to petitioner's use of its own mark and for failure
to establish confusing similarity between said trademarks, private
respondent's action for infringement must necessarily fail.
WHEREFORE, premises considered, the questioned decision and
resolution are hereby REVERSED and SET ASIDE.
SO ORDERED.
Bellosillo and Hermosisima, Jr., JJ., concur.

[G.R. No. 114508. November 19, 1999]

PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS,
DIRECTOR OF PATENTS and the BARBIZON
CORPORATION, respondents.
DECISION
PUNO, J.:

The Convention of Paris for the Protection of Industrial Property is

a multi-lateral treaty which the Philippines bound itself to honor
and enforce in this country. As to whether or not the treaty affords
protection to a foreign corporation against a Philippine applicant
for the registration of a similar trademark is the principal issue in
this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest
of petitioner Pribhdas J. Mirpuri, filed an application with the
Bureau of Patents for the registration of the trademark "Barbizon"
for use in brassieres and ladies undergarments. Escobar alleged
that she had been manufacturing and selling these products
under the firm name "L & BM Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized
and doing business under the laws of New York, U.S.A., opposed
the application. It claimed that:
"The mark BARBIZON of respondent-applicant is confusingly
similar to the trademark BARBIZON which opposer owns and has
not abandoned.
That opposer will be damaged by the registration of the mark
BARBIZON and its business reputation and goodwill will suffer
great and irreparable injury.
That the respondent-applicant's use of the said mark BARBIZON
which resembles the trademark used and owned by opposer,
constitutes an unlawful appropriation of a mark previously used in

the Philippines and not abandoned and therefore a statutory

violation of Section 4 (d) of Republic Act No. 166, as amended." [1]
This was docketed as Inter Partes Case No. 686 (IPC No.
686). After filing of the pleadings, the parties submitted the case
for decision.
On June 18, 1974, the Director of Patents rendered judgment
dismissing the opposition and giving due course to Escobar's
application, thus:
"WHEREFORE, the opposition should be, as it is hereby,
DISMISSED. Accordingly, Application Serial No. 19010 for the
registration of the trademark BARBIZON, of respondent Lolita R.
Escobar, is given due course.
IT IS SO ORDERED."[2]
This decision became final and on September 11, 1974, Lolita
Escobar was issued a certificate of registration for the trademark
"Barbizon." The trademark was "for use in "brassieres and lady's
underwear garments like panties."[3]
Escobar later assigned all her rights and interest over the
trademark to petitioner Pribhdas J. Mirpuri who, under his firm
name then, the "Bonito Enterprises," was the sole and exclusive
distributor of Escobar's "Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents
the Affidavit of Use of the trademark required under Section 12 of

Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to
this failure, the Bureau of Patents cancelled Escobar's certificate
of registration.
On May 27, 1981, Escobar reapplied for registration of the
cancelled trademark. Mirpuri filed his own application for
registration of Escobar's trademark. Escobar later assigned her
application to herein petitioner and this application was opposed
by private respondent. The case was docketed as Inter Partes
Case No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
"(a) The Opposer has adopted the trademark BARBIZON (word),
sometime in June 1933 and has then used it on various kinds of
wearing apparel. On August 14, 1934, Opposer obtained from the
United States Patent Office a more recent registration of the said
mark under Certificate of Registration No. 316,161. On March 1,
1949, Opposer obtained from the United States Patent Office a
more recent registration for the said trademark under Certificate
of Registration No. 507,214, a copy of which is herewith attached
as Annex `A.' Said Certificate of Registration covers the following
goods-- wearing apparel: robes, pajamas, lingerie, nightgowns
and slips;
(b) Sometime in March 1976, Opposer further adopted the
trademark BARBIZON and Bee design and used the said mark in
various kinds of wearing apparel. On March 15, 1977, Opposer
secured from the United States Patent Office a registration of the

said mark under Certificate of Registration No. 1,061,277, a copy

of which is herein enclosed as Annex `B.' The said Certificate of
Registration covers the following goods: robes, pajamas, lingerie,
nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the
trademark BARBIZON and a Representation of a Woman and
thereafter used the said trademark on various kinds of wearing
apparel. Opposer obtained from the United States Patent Office
registration of the said mark on April 5, 1983 under Certificate of
Registration No. 1,233,666 for the following goods: wearing
apparel: robes, pajamas, nightgowns and lingerie. A copy of the
said certificate of registration is herewith enclosed as Annex `C.'
(d) All the above registrations are subsisting and in force and
Opposer has not abandoned the use of the said trademarks. In
fact, Opposer, through a wholly-owned Philippine subsidiary, the
Philippine Lingerie Corporation, has been manufacturing the
goods covered by said registrations and selling them to various
countries, thereby earning valuable foreign exchange for the
country. As a result of respondent-applicant's misappropriation of
Opposer's BARBIZON trademark, Philippine Lingerie Corporation is
prevented from selling its goods in the local market, to the
damage and prejudice of Opposer and its wholly-owned
subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have
been used in many countries, including the Philippines, for at

least 40 years and has enjoyed international reputation and good

will for their quality. To protect its registrations in countries where
the goods covered by the registrations are being sold, Opposer
has procured the registration of the trademark BARBIZON in the
following countries:Australia, Austria, Abu Dhabi, Argentina,
Belgium, Bolivia, Bahrain, Canada, Chile, Colombia, Denmark,
Ecuador, France, West Germany, Greece, Guatemala, Hongkong,
Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco,
Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El
Salvador, South Africa, Zambia, Egypt, and Iran, among others;
(f) To enhance its international reputation for quality goods and to
further promote goodwill over its name, marks and products,
Opposer has extensively advertised its products, trademarks and
name in various publications which are circulated in the United
States and many countries around the world, including the
Philippines;
(g) The trademark BARBIZON was fraudulently registered in the
Philippines by one Lolita R. Escobar under Registration No. 21920,
issued on September 11, 1974, in violation of Article 189 (3) of
the Revised Penal Code and Section 4 (d) of the Trademark
Law. Herein respondent applicant acquired by assignment the
`rights' to the said mark previously registered by Lolita Escobar,
hence respondent-applicant's title is vitiated by the same fraud
and criminal act. Besides, Certificate of Registration No. 21920
has been cancelled for failure of either Lolita Escobar or herein
respondent-applicant, to seasonably file the statutory affidavit of

use. By applying for a re-registration of the mark BARBIZON

subject of this opposition, respondent-applicant seeks to
perpetuate the fraud and criminal act committed by Lolita
Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design
and BARBIZON and Representation of a Woman trademarks
qualify as well-known trademarks entitled to protection under
Article6bis of the Convention of Paris for the Protection of
Industrial Property and further amplified by the Memorandum of
the Minister of Trade to the Honorable Director of Patents dated
October 25, 1983 [sic],[4] Executive Order No. 913 dated October
7, 1963 and the Memorandum of the Minister of Trade and
Industry to the Honorable Director of Patents dated October 25,
1983.
(i) The trademark applied for by respondent applicant is identical
to Opposer's BARBIZON trademark and constitutes the dominant
part of Opposer's two other marks namely, BARBIZON and Bee
design and BARBIZON and a Representation of a Woman. The
continued use by respondent-applicant of Opposer's trademark
BARBIZON on goods belonging to Class 25 constitutes a clear
case of commercial and criminal piracy and if allowed registration
will violate not only the Trademark Law but also Article 189 of the
Revised Penal Code and the commitment of the Philippines to an
international treaty."[5]

Replying to private respondent's opposition, petitioner raised the

defense of res judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the
business name "Barbizon International." Petitioner registered the
name with the Department of Trade and Industry (DTI) for which a
certificate of registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal
Affairs of the DTI a petition for cancellation of petitioner's
business name.
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled
petitioner's certificate of registration, and declared private
respondent the owner and prior user of the business name
"Barbizon International." Thus:
"WHEREFORE, the petition is hereby GRANTED and petitioner is
declared the owner and prior user of the business name
"BARBIZON INTERNATIONAL" under Certificate of Registration No.
87-09000 dated March 10, 1987 and issued in the name of
respondent, is [sic] hereby ordered revoked and cancelled. x x
x."[6]
Meanwhile, in IPC No. 2049, the evidence of both parties were
received by the Director of Patents. On June 18, 1992, the Director
rendered a decision declaring private respondent's opposition
barred by res judicata and giving due course to petitioner's
application for registration, to wit:

"WHEREFORE, the present Opposition in Inter Partes Case No.

2049 is hereby DECLARED BARRED by res judicata and is hereby
DISMISSED. Accordingly, Application Serial No. 45011 for
trademark BARBIZON filed by Pribhdas J. Mirpuri is GIVEN DUE
COURSE.
SO ORDERED."[7]
Private respondent questioned this decision before the Court of
Appeals in CA-G.R. SP No. 28415. On April 30, 1993, the Court of
Appeals reversed the Director of Patents finding that IPC No. 686
was not barred by judgment in IPC No. 2049 and ordered that the
case be remanded to the Bureau of Patents for further
proceedings, viz:
"WHEREFORE, the appealed Decision No. 92-13 dated June 18,
1992 of the Director of Patents in Inter Partes Case No. 2049 is
hereby SET ASIDE; and the case is hereby remanded to the
Bureau of Patents for further proceedings, in accordance with this
pronouncement. No costs."[8]
In a Resolution dated March 16, 1994, the Court of Appeals denied
reconsideration of its decision.[9] Hence, this recourse.
Before us, petitioner raises the following issues:
"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF
PATENTS IN INTER PARTES CASE NO. 686 RENDERED ON JUNE 18,
1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO FAR
AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS CONCERNED;

2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY

APPLIED THE PRINCIPLE OF RES JUDICATA IN DISMISSING PRIVATE
RESPONDENT BARBIZON'S OPPOSITION TO PETITIONER'S
APPLICATION FOR REGISTRATION FOR THE TRADEMARK
BARBIZON, WHICH HAS SINCE RIPENED TO CERTIFICATE OF
REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE
MERITS' REQUIRED A 'HEARING WHERE BOTH PARTIES ARE
SUPPOSED TO ADDUCE EVIDENCE' AND WHETHER THE JOINT
SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR
RESPECTIVE PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR
DOCUMENTARY EVIDENCE FALLS WITHIN THE MEANING OF
'JUDGMENT ON THE MERITS' AS ONE OF THE REQUISITES TO
CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND
INDUSTRY CANCELLING PETITIONER'S FIRM NAME 'BARBIZON
INTERNATIONAL' AND WHICH DECISION IS STILL PENDING
RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE
DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS THE
RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF
THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION
AND THE TRADEMARK LAW (R.A. 166) WHICH IS WITHIN THE
ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DIRECTOR OF
PATENTS."[10]

Before ruling on the issues of the case, there is need for a brief
background on the function and historical development of
trademarks and trademark law.
A "trademark" is defined under R.A. 166, the Trademark Law, as
including "any word, name, symbol, emblem, sign or device or
any combination thereof adopted and used by a manufacturer or
merchant to identify his goods and distinguish them from those
manufactured, sold or dealt in by others."[11] This definition has
been simplified in R.A. No. 8293, the Intellectual Property Code of
the Philippines, which defines a "trademark" as "any visible sign
capable of distinguishing goods."[12] In Philippine jurisprudence,
the function of a trademark is to point out distinctly the origin or
ownership of the goods to which it is affixed; to secure to him,
who has been instrumental in bringing into the market a superior
article of merchandise, the fruit of his industry and skill; to assure
the public that they are procuring the genuine article; to prevent
fraud and imposition; and to protect the manufacturer against
substitution and sale of an inferior and different article as his
product.[13]
Modern authorities on trademark law view trademarks as
performing three distinct functions: (1) they indicate origin or
ownership of the articles to which they are attached; (2) they
guarantee that those articles come up to a certain standard of
quality; and (3) they advertise the articles they symbolize. [14]

Symbols have been used to identify the ownership or origin of

articles for several centuries.[15] As early as 5,000 B.C., markings
on pottery have been found by archaeologists. Cave drawings in
southwestern Europe show bison with symbols on their flanks.
[16]

Archaeological discoveries of ancient Greek and Roman

inscriptions on sculptural works, paintings, vases, precious stones,

glassworks, bricks, etc. reveal some features which are thought to
be marks or symbols. These marks were affixed by the creator or
maker of the article, or by public authorities as indicators for the
payment of tax, for disclosing state monopoly, or devices for the
settlement of accounts between an entrepreneur and his
workmen.[17]
In the Middle Ages, the use of many kinds of marks on a variety of
goods was commonplace. Fifteenth century England saw the
compulsory use of identifying marks in certain trades. There were
the baker's mark on bread, bottlemaker's marks, smith's marks,
tanner's marks, watermarks on paper, etc. [18] Every guild had its
own mark and every master belonging to it had a special mark of
his own. The marks were not trademarks but police marks
compulsorily imposed by the sovereign to let the public know that
the goods were not "foreign" goods smuggled into an area where
the guild had a monopoly, as well as to aid in tracing defective
work or poor craftsmanship to the artisan. [19] For a similar reason,
merchants also used merchants' marks. Merchants dealt in goods
acquired from many sources and the marks enabled them to

identify and reclaim their goods upon recovery after shipwreck or

piracy.[20]
With constant use, the mark acquired popularity and became
voluntarily adopted. It was not intended to create or continue
monopoly but to give the customer an index or guarantee of
quality.[21] It was in the late 18th century when the industrial
revolution gave rise to mass production and distribution of
consumer goods that the mark became an important
instrumentality of trade and commerce.[22] By this time,
trademarks did not merely identify the goods; they also indicated
the goods to be of satisfactory quality, and thereby stimulated
further purchases by the consuming public. [23] Eventually, they
came to symbolize the goodwill and business reputation of the
owner of the product and became a property right protected by
law.[24] The common law developed the doctrine of trademarks
and tradenames "to prevent a person from palming off his goods
as another's, from getting another's business or injuring his
reputation by unfair means, and, from defrauding the
public."[25] Subsequently, England and the United States enacted
national legislation on trademarks as part of the law regulating
unfair trade.[26] It became the right of the trademark owner to
exclude others from the use of his mark, or of a confusingly
similar mark where confusion resulted in diversion of trade or
financial injury. At the same time, the trademark served as a
warning against the imitation or faking of products to prevent the
imposition of fraud upon the public.[27]

Today, the trademark is not merely a symbol of origin and

goodwill; it is often the most effective agent for the actual
creation and protection of goodwill. It imprints upon the public
mind an anonymous and impersonal guaranty of satisfaction,
creating a desire for further satisfaction. In other words, the mark
actually sells the goods.[28] The mark has become the "silent
salesman," the conduit through which direct contact between the
trademark owner and the consumer is assured. It has invaded
popular culture in ways never anticipated that it has become a
more convincing selling point than even the quality of the article
to which it refers.[29] In the last half century, the unparalleled
growth of industry and the rapid development of communications
technology have enabled trademarks, tradenames and other
distinctive signs of a product to penetrate regions where the
owner does not actually manufacture or sell the product
itself. Goodwill is no longer confined to the territory of actual
market penetration; it extends to zones where the marked article
has been fixed in the public mind through advertising. [30] Whether
in the print, broadcast or electronic communications medium,
particularly on the Internet,[31] advertising has paved the way for
growth and expansion of the product by creating and earning a
reputation that crosses over borders, virtually turning the whole
world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner
brings this action claiming that "Barbizon" products have been
sold in the Philippines since 1970. Petitioner developed this

market by working long hours and spending considerable sums of

money on advertisements and promotion of the trademark and its
products. Now, almost thirty years later, private respondent, a
foreign corporation, "swaggers into the country like a conquering
hero," usurps the trademark and invades petitioner's market.
[32]

Justice and fairness dictate that private respondent be

prevented from appropriating what is not its own. Legally, at the

same time, private respondent is barred from questioning
petitioner's ownership of the trademark because of res judicata.[33]
Literally, res judicata means a matter adjudged, a thing judicially
acted upon or decided; a thing or matter settled by judgment.
[34]

In res judicata, the judgment in the first action is considered

conclusive as to every matter offered and received therein, as to

any other admissible matter which might have been offered for
that purpose, and all other matters that could have been
adjudged therein.[35] Res judicatais an absolute bar to a
subsequent action for the same cause; and its requisites are: (a)
the former judgment or order must be final; (b) the judgment or
order must be one on the merits; (c) it must have been rendered
by a court having jurisdiction over the subject matter and parties;
(d) there must be between the first and second actions, identity of
parties, of subject matter and of causes of action. [36]
The Solicitor General, on behalf of respondent Director of Patents,
has joined cause with petitioner. Both claim that all the four
elements of res judicata have been complied with: that the
judgment in IPC No. 686 was final and was rendered by the

Director of Patents who had jurisdiction over the subject matter

and parties; that the judgment in IPC No. 686 was on the merits;
and that the lack of a hearing was immaterial because substantial
issues were raised by the parties and passed upon by the Director
of Patents.[37]
The decision in IPC No. 686 reads as follows:
"x x x.
Neither party took testimony nor adduced documentary
evidence. They submitted the case for decision based on the
pleadings which, together with the pertinent records, have all
been carefully considered.
Accordingly, the only issue for my disposition is whether or not
the herein opposer would probably be damaged by the
registration of the trademark BARBIZON sought by the
respondent-applicant on the ground that it so resembles the
trademark BARBIZON allegedly used and owned by the former to
be `likely to cause confusion, mistake or to deceive purchasers.'
On record, there can be no doubt that respondent-applicant's
sought-to-be-registered trademark BARBIZON is similar, in fact
obviously identical, to opposer's alleged trademark BARBIZON, in
spelling and pronunciation. The only appreciable but very
negligible difference lies in their respective appearances or
manner of presentation. Respondent-applicant's trademark is in

bold letters (set against a black background), while that of the

opposer is offered in stylish script letters.
It is opposer's assertion that its trademark BARBIZON has been
used in trade or commerce in the Philippines prior to the date of
application for the registration of the identical mark BARBIZON by
the respondent-applicant. However, the allegation of facts in
opposer's verified notice of opposition is devoid of such material
information. In fact, a reading of the text of said verified
opposition reveals an apparent, if not deliberate, omission of the
date (or year) when opposer's alleged trademark BARBIZON was
first used in trade in the Philippines (see par. No. 1, p. 2, Verified
Notice of Opposition, Rec.).Thus, it cannot here and now be
ascertained whether opposer's alleged use of the trademark
BARBIZON could be prior to the use of the identical mark by the
herein respondent-applicant, since the opposer attempted neither
to substantiate its claim of use in local commerce with any proof
or evidence. Instead, the opposer submitted the case for decision
based merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended
application for registration that she first used the trademark
BARBIZON for brassiere (or 'brasseire') and ladies underwear
garments and panties as early as March 3, 1970. Be that as it
may, there being no testimony taken as to said date of first use,
respondent-applicant will be limited to the filing date, June 15,
1970, of her application as the date of first use (Rule 173, Rules of
Practice in Trademark Cases).

From the foregoing, I conclude that the opposer has not made out
a case of probable damage by the registration of the respondentapplicant's mark BARBIZON.
WHEREFORE, the opposition should be, as it is hereby,
DISMISSED. Accordingly, Application Serial No. 19010, for the
registration of the trademark BARBIZON of respondent Lolita R.
Escobar, is given due course."[38]
The decision in IPC No. 686 was a judgment on the merits and it
was error for the Court of Appeals to rule that it was not. A
judgment is on the merits when it determines the rights and
liabilities of the parties based on the disclosed facts, irrespective
of formal, technical or dilatory objections. [39] It is not necessary
that a trial should have been conducted. If the court's judgment is
general, and not based on any technical defect or objection, and
the parties had a full legal opportunity to be heard on their
respective claims and contentions, it is on the merits although
there was no actual hearing or arguments on the facts of the
case.[40] In the case at bar, the Director of Patents did not dismiss
private respondent's opposition on a sheer technicality. Although
no hearing was conducted, both parties filed their respective
pleadings and were given opportunity to present evidence. They,
however, waived their right to do so and submitted the case for
decision based on their pleadings. The lack of evidence did not
deter the Director of Patents from ruling on the case, particularly
on the issue of prior use, which goes into the very substance of
the relief sought by the parties. Since private respondent failed to

prove prior use of its trademark, Escobar's claim of first use was
upheld.
The judgment in IPC No. 686 being on the merits, petitioner and
the Solicitor General allege that IPC No. 686 and IPC No. 2049 also
comply with the fourth requisite of res judicata, i.e., they involve
the same parties and the same subject matter, and have identical
causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same
parties and the same subject matter. Petitioner herein is the
assignee of Escobar while private respondent is the same
American corporation in the first case. The subject matter of both
cases is the trademark "Barbizon." Private respondent counterargues, however, that the two cases do not have identical causes
of action. New causes of action were allegedly introduced in IPC
No. 2049, such as the prior use and registration of the trademark
in the United States and other countries worldwide, prior use in
the Philippines, and the fraudulent registration of the mark in
violation of Article 189 of the Revised Penal Code. Private
respondent also cited protection of the trademark under the
Convention of Paris for the Protection of Industrial Property,
specifically Article 6bis thereof, and the implementation of Article
6bis by two Memoranda dated November 20, 1980 and October
25, 1983 of the Minister of Trade and Industry to the Director of
Patents, as well as Executive Order (E.O.) No. 913.

The Convention of Paris for the Protection of Industrial Property,

otherwise known as the Paris Convention, is a multilateral treaty
that seeks to protect industrial property consisting of patents,
utility models, industrial designs, trademarks, service marks,
trade names and indications of source or appellations of origin,
and at the same time aims to repress unfair competition. [41] The
Convention is essentially a compact among various countries
which, as members of the Union, have pledged to accord to
citizens of the other member countries trademark and other
rights comparable to those accorded their own citizens by their
domestic laws for an effective protection against unfair
competition.[42] In short, foreign nationals are to be given the
same treatment in each of the member countries as that country
makes available to its own citizens.[43] Nationals of the various
member nations are thus assured of a certain minimum of
international protection of their industrial property. [44]
The Convention was first signed by eleven countries in Paris on
March 20, 1883.[45] It underwent several revisions-- at Brussels in
1900, at Washington in 1911, at The Hague in 1925, at London in
1934, at Lisbon in 1958,[46] and at Stockholm in 1967. Both the
Philippines and the United States of America, herein private
respondent's country, are signatories to the Convention. The
United States acceded on May 30, 1887 while the Philippines,
through its Senate, concurred on May 10, 1965. [47] The Philippines'
adhesion became effective on September 27, 1965, [48] and from

this date, the country obligated itself to honor and enforce the
provisions of the Convention.[49]
In the case at bar, private respondent anchors its cause of action
on the first paragraph of Article 6bis of the Paris Convention which
reads as follows:
"Article 6bis
(1) The countries of the Union undertake, either
administratively if their legislation so permits, or at the
request of an interested party, to refuse or to cancel the
registration and to prohibit the use, of a trademark which
constitutes a reproduction, an imitation, or a translation,
liable to create confusion, of a mark considered by the
competent authority of the country of registration or use
to be well-known in that country as being already the
mark of a person entitled to the benefits of this
Convention and used for identical or similar goods. These
provisions shall also apply when the essential part of the
mark constitutes a reproduction of any such well-known
mark or an imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration
shall be allowed for seeking the cancellation of such a mark. The
countries of the Union may provide for a period within which the
prohibition of use must be sought.

(3) No time limit shall be fixed for seeking the cancellation or the
prohibition of the use of marks registered or used in bad faith." [50]
This Article governs protection of wellknown trademarks. Under the first paragraph, each country of
the Union bound itself to undertake to refuse or cancel the
registration, and prohibit the use of a trademark which is a
reproduction, imitation or translation, or any essential part of
which trademark constitutes a reproduction, liable to create
confusion, of a mark considered by the competent authority of the
country where protection is sought, to be well-known in the
country as being already the mark of a person entitled to the
benefits of the Convention, and used for identical or similar
goods.
Article 6bis was first introduced at The Hague in 1925 and
amended in Lisbon in 1952.[51] It is a self-executing provision and
does not require legislative enactment to give it effect in the
member country.[52] It may be applied directly by the tribunals and
officials of each member country by the mere publication or
proclamation of the Convention, after its ratification according to
the public law of each state and the order for its execution. [53]
The essential requirement under Article 6bis is that the trademark
to be protected must be "well-known" in the country where
protection is sought. The power to determine whether a
trademark is well-known lies in the "competent authority of the
country of registration or use." This competent authority would be

either the registering authority if it has the power to decide this,

or the courts of the country in question if the issue comes before
a court.[54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis
Villafuerte of the Ministry of Trade issued a Memorandum to the
Director of Patents. The Minister ordered the Director that:
"Pursuant to the Paris Convention for the Protection of Industrial
Property to which the Philippines is a signatory, you are hereby
directed to reject all pending applications for Philippine
registration of signature and other world-famous trademarks by
applicants other than its original owners or users.
The conflicting claims over internationally known trademarks
involve such name brands as Lacoste, Jordache, Vanderbilt,
Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la
Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene,
Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine
registrants of such trademarks should be asked to surrender their
certificates of registration, if any, to avoid suits for damages and
other legal action by the trademarks' foreign or local owners or
original users.
You are also required to submit to the undersigned a progress
report on the matter.
For immediate compliance."[55]

Three years later, on October 25, 1983, then Minister Roberto

Ongpin issued another Memorandum to the Director of
Patents, viz:
"Pursuant to Executive Order No. 913 dated 7 October 1983 which
strengthens the rule-making and adjudicatory powers of the
Minister of Trade and Industry and provides inter alia, that `such
rule-making and adjudicatory powers should be revitalized in
order that the Minister of Trade and Industry can x x x apply more
swift and effective solutions and remedies to old and new
problems x x x such as infringement of internationally-known
tradenames and trademarks x x x' and in view of the decision of
the Intermediate Appellate Court in the case of LA CHEMISE
LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359
(17) June 1983][56] which affirms the validity of the MEMORANDUM
of then Minister Luis R. Villafuerte dated 20 November 1980
confirming our obligations under the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY to which the Republic of
the Philippines is a signatory, you are hereby directed to
implement measures necessary to effect compliance with our
obligations under said Convention in general, and, more
specifically, to honor our commitment under Section
6bis[57] thereof, as follows:
1. Whether the trademark under consideration is well-known in
the Philippines or is a mark already belonging to a person entitled
to the benefits of the CONVENTION, this should be established,
pursuant to Philippine Patent Office procedures in inter partes and

ex parte cases, according to any of the following criteria or any

combination thereof:
(a) a declaration by the Minister of Trade and Industry that the
trademark being considered is already well-known in the
Philippines such that permission for its use by other than its
original owner will constitute a reproduction, imitation, translation
or other infringement;
(b) that the trademark is used in commerce internationally,
supported by proof that goods bearing the trademark are sold on
an international scale, advertisements, the establishment of
factories, sales offices, distributorships, and the like, in different
countries, including volume or other measure of international
trade and commerce;
(c) that the trademark is duly registered in the industrial property
office(s) of another country or countries, taking into consideration
the date of such registration;
(d) that the trademark has long been established and obtained
goodwill and international consumer recognition as belonging to
one owner or source;
(e) that the trademark actually belongs to a party claiming
ownership and has the right to registration under the provisions of
the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall
include tradenames, service marks, logos, signs, emblems,

insignia or other similar devices used for identification and

recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or
cancel the registration of, trademarks which constitute a
reproduction, translation or imitation of a trademark owned by a
person, natural or corporate, who is a citizen of a country
signatory to the PARIS CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the
Opposition in cases already or hereafter filed against the
registration of trademarks entitled to protection of Section 6 bis of
said PARIS CONVENTION as outlined above, by remanding
applications filed by one not entitled to such protection for final
disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature
and other world-famous trademarks filed by applicants other than
their original owners or users shall be rejected forthwith. Where
such applicants have already obtained registration contrary to the
abovementioned PARIS CONVENTION and/or Philippine Law, they
shall be directed to surrender their Certificates of Registration to
the Philippine Patent Office for immediate cancellation
proceedings.
x x x."[58]

In the Villafuerte Memorandum, the Minister of Trade instructed

the Director of Patents to reject all pending applications for
Philippine registration of signature and other world-famous
trademarks by applicants other than their original owners or
users. The Minister enumerated several internationally-known
trademarks and ordered the Director of Patents to require
Philippine registrants of such marks to surrender their certificates
of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry
did not enumerate well-known trademarks but laid down
guidelines for the Director of Patents to observe in determining
whether a trademark is entitled to protection as a well-known
mark in the Philippines under Article 6bis of the Paris
Convention. This was to be established through Philippine Patent
Office procedures in inter partesand ex parte cases pursuant to
the criteria enumerated therein. The Philippine Patent Office was
ordered to refuse applications for, or cancel the registration of,
trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person who is a citizen of a
member of the Union. All pending applications for registration of
world-famous trademarks by persons other than their original
owners were to be rejected forthwith. The Ongpin Memorandum
was issued pursuant to Executive Order No. 913 dated October 7,
1983 of then President Marcos which strengthened the rulemaking and adjudicatory powers of the Minister of Trade and

Industry for the effective protection of consumers and the

application of swift solutions to problems in trade and industry. [59]
Both the Villafuerte and Ongpin Memoranda were sustained by
the Supreme Court in the 1984 landmark case of La Chemise
Lacoste, S.A. v. Fernandez.[60] This court ruled therein that under
the provisions of Article 6bis of the Paris Convention, the Minister
of Trade and Industry was the "competent authority" to determine
whether a trademark is well-known in this country. [61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15)
years after the adoption of the Paris Convention in 1965. In the
case at bar, the first inter partes case, IPC No. 686, was filed in
1970,before the Villafuerte Memorandum but five (5)
years after the effectivity of the Paris Convention. Article
6bis was already in effect five years before the first case was
instituted. Private respondent, however, did not cite the
protection of Article 6bis, neither did it mention the Paris
Convention at all. It was only in 1981 when IPC No. 2049 was
instituted that the Paris Convention and the Villafuerte
Memorandum, and, during the pendency of the case, the 1983
Ongpin Memorandum were invoked by private respondent.
The Solicitor General argues that the issue of whether the
protection of Article 6bis of the Convention and the two
Memoranda is barred by res judicata has already been answered
in Wolverine Worldwide, Inc. v. Court of Appeals.[62] In this case,
petitioner Wolverine, a foreign corporation, filed with the

Philippine Patent Office a petition for cancellation of the

registration certificate of private respondent, a Filipino citizen, for
the trademark "Hush Puppies" and "Dog Device." Petitioner
alleged that it was the registrant of the internationally-known
trademark in the United States and other countries, and cited
protection under the Paris Convention and the Ongpin
Memorandum. The petition was dismissed by the Patent Office on
the ground of res judicata. It was found that in 1973 petitioner's
predecessor-in-interest filed two petitions for cancellation of the
same trademark against respondent's predecessor-in-interest. The
Patent Office dismissed the petitions, ordered the cancellation of
registration of petitioner's trademark, and gave due course to
respondent's application for registration. This decision was
sustained by the Court of Appeals, which decision was not
elevated to us and became final and executory. [63]
Wolverine claimed that while its previous petitions were filed
under R.A. No. 166, the Trademark Law, its subsequent petition
was based on a new cause of action, i.e., the Ongpin
Memorandum and E.O. No. 913 issued in 1983, after finality of the
previous decision. We held that the said Memorandum and E.O.
did not grant a new cause of action because it did "not amend the
Trademark Law," x x x "nor did it indicate a new policy with
respect to the registration in the Philippines of world-famous
trademarks."[64] This conclusion was based on the finding that
Wolverine's two previous petitions and subsequent petition dealt
with the same issue of ownership of the trademark. [65] In other

words, since the first and second cases involved the same issue of
ownership, then the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark
"Barbizon" was not raised in IPC No. 686. Private respondent's
opposition therein was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause
damage to private respondent's business reputation and goodwill;
and
(c) that Escobar's use of the trademark amounts to an unlawful
appropriation of a mark previously used in the Philippines which
act is penalized under Section 4 (d) of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth several
issues summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as
trademark on its products such as robes, pajamas, lingerie,
nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the
United States Patent Office in 1934 and 1949; and that variations
of the same trademark, i.e., "BARBIZON" with Bee design and
"BARBIZON" with the representation of a woman were also
registered with the U.S. Patent Office in 1961 and 1976;

(c) that these marks have been in use in the Philippines and in
many countries all over the world for over forty years. "Barbizon"
products have been advertised in international publications and
the marks registered in 36 countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in
1974 was based on fraud; and this fraudulent registration was
cancelled in 1979, stripping Escobar of whatsoever right she had
to the said mark;
(e) Private respondent's trademark is entitled to protection as a
well-known mark under Article 6bis of the Paris Convention,
Executive Order No. 913, and the two Memoranda dated
November 20, 1980 and October 25, 1983 of the Minister of Trade
and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its
use on the same class of goods as the latter's amounts to a
violation of the Trademark Law and Article 189 of the Revised
Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the
first registration and use of the trademark in the United States
and other countries, and the international recognition and
reputation of the trademark established by extensive use and
advertisement of private respondent's products for over forty
years here and abroad. These are different from the issues of
confusing similarity and damage in IPC No. 686. The issue of
prior use may have been raised in IPC No. 686 but this claim was

limited to prior use in the Philippines only. Prior use in IPC No.
2049 stems from private respondent's claim asoriginator of the
word and symbol "Barbizon,"[66] as the first and registered user of
the mark attached to its products which have been sold and
advertised worldwide for a considerable number of years prior to
petitioner's first application for registration of her trademark in
the Philippines. Indeed, these are substantial allegations that
raised new issues and necessarily gave private respondent a new
cause of action.Res judicata does not apply to rights, claims or
demands, although growing out of the same subject matter,
which constitute separate or distinct causes of action and were
not put in issue in the former action.[67]
Respondent corporation also introduced in the second case a fact
that did not exist at the time the first case was filed and
terminated. The cancellation of petitioner's certificate of
registration for failure to file the affidavit of use arose only after
IPC No. 686. It did not and could not have occurred in the first
case, and this gave respondent another cause to oppose the
second application. Res judicata extends only to facts and
conditions as they existed at the time judgment was rendered and
to the legal rights and relations of the parties fixed by the facts so
determined.[68] When new facts or conditions intervene before the
second suit, furnishing a new basis for the claims and defenses of
the parties, the issues are no longer the same, and the former
judgment cannot be pleaded as a bar to the subsequent action. [69]

It is also noted that the oppositions in the first and second cases
are based on different laws. The opposition in IPC No. 686 was
based on specific provisions of the Trademark Law, i.e., Section 4
(d)[70]on confusing similarity of trademarks and Section 8 [71] on the
requisite damage to file an opposition to a petition for
registration. The opposition in IPC No. 2049 invoked the Paris
Convention, particularly Article 6bis thereof, E.O. No. 913 and the
two Memoranda of the Minister of Trade and Industry. This
opposition also invoked Article 189 of the Revised Penal Code
which is a statute totally different from the Trademark Law.
[72]

Causes of action which are distinct and independent from each

other, although arising out of the same contract, transaction, or

state of facts, may be sued on separately, recovery on one being
no bar to subsequent actions on others. [73] The mere fact that the
same relief is sought in the subsequent action will not render the
judgment in the prior action operative as res judicata, such as
where the two actions are based on different statutes. [74] Res
judicata therefore does not apply to the instant case and
respondent Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple
property cases. Trademarks deal with the psychological function
of symbols and the effect of these symbols on the public at large.
Trademarks play a significant role in communication, commerce

[75]

and trade, and serve valuable and interrelated business functions,

both nationally and internationally. For this reason, all agreements
concerning industrial property, like those on trademarks and

tradenames, are intimately connected with economic

development.[76] Industrial property encourages investments in
new ideas and inventions and stimulates creative efforts for the
satisfaction of human needs. They speed up transfer of
technology and industrialization, and thereby bring about social
and economic progress.[77] These advantages have been
acknowledged by the Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an effective
intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer
of technology, it attracts foreign investments, and ensures market
access for our products."[78] The Intellectual Property Code took
effect on January 1, 1998 and by its express provision, [79] repealed
the Trademark Law,[80] the Patent Law,[81] Articles 188 and 189 of
the Revised Penal Code, the Decree on Intellectual Property,
[82]

and the Decree on Compulsory Reprinting of Foreign

Textbooks.[83] The Code was enacted to strengthen the intellectual

and industrial property system in the Philippines as mandated by
the country's accession to the Agreement Establishing the World
Trade Organization (WTO).[84]
The WTO is a common institutional framework for the conduct of
trade relations among its members in matters related to the
multilateral and plurilateral trade agreements annexed to the
WTO Agreement.[85] The WTO framework ensures a "single
undertaking approach" to the administration and operation of all
agreements and arrangements attached to the WTO

Agreement. Among those annexed is the Agreement on TradeRelated Aspects of Intellectual Property Rights or TRIPs.
[86]

Members to this Agreement "desire to reduce distortions and

impediments to international trade, taking into account the need

to promote effective and adequate protection of intellectual
property rights, and to ensure that measures and procedures to
enforce intellectual property rights do not themselves become
barriers to legitimate trade." To fulfill these objectives, the
members have agreed to adhere to minimum standards of
protection set by several Conventions. [87] These Conventions
are: the Berne Convention for the Protection of Literary and
Artistic Works (1971), the Rome Convention or the International
Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organisations, the Treaty on
Intellectual Property in Respect of Integrated Circuits, and the
Paris Convention (1967), as revised in Stockholm on July 14,
1967.[88]
A major proportion of international trade depends on the
protection of intellectual property rights. [89] Since the late 1970's,
the unauthorized counterfeiting of industrial property and
trademarked products has had a considerable adverse impact on
domestic and international trade revenues. [90] The TRIPs
Agreement seeks to grant adequate protection of intellectual
property rights by creating a favorable economic environment to
encourage the inflow of foreign investments, and strengthening
the multi-lateral trading system to bring about economic, cultural

and technological independence.[91] The Philippines and the

United States of America have acceded to the WTO
Agreement. This Agreement has revolutionized international
business and economic relations among states, and has propelled
the world towards trade liberalization and economic globalization.
[92]

Protectionism and isolationism belong to the past. Trade is no

longer confined to a bilateral system. There is now "a new era of

global economic cooperation, reflecting the widespread desire to
operate in a fairer and more open multilateral trading
system."[93] Conformably, the State must reaffirm its commitment
to the global community and take part in evolving a new
international economic order at the dawn of the new millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 28415 are
affirmed.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and YnaresSantiago, JJ., concur.